optionMONSTER systems identified the sale of 5,000 August 42 puts for the bid price of $2 on a wide bid/ask spread. The strike's previous open interest was a mere 3 contracts, so this is a new position.

The put seller is looking for OC to hold above $42 through expiration in mid-August, at which time the $2 credit would be kept as profit. But if the stock falls below the strike price, the trader would face the obligation to buy shares at that level. (See our Education section)

OC is up 2.36 percent to $43.86 in midday trading. The glass manufacturer hit an all-time high of $46.64 at the start of March and bounced off support at $40 last week.

The company is scheduled to announce quarterly results tomorrow morning before the market opens.

Total option volume in the name tops 5,600 so far today, compared to a full-session average of 325 in the last month.

So far, my articles have taken you through a logical progression of option theory and fundamental concepts of options. As of yet, I have not mentioned a single strategy and for a good reason! The actual application of a strategy should come AFTER you learn about the option product itself.

optionMONSTER® provides stock market insight, advanced options education, and actionable trade ideas to meet the needs of do-it-yourself investors. After spending decades in the trading pits of Chicago, Jon 'DRJ' and Pete Najarian founded the company in 2005 to help people better manage their own investment portfolios.

OptionsHouse is separate from but affiliated with optionMONSTER®. Both are subsidiaries of Aperture Group, LLC.

All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.

optionMONSTER's reference to specific securities should not be construed as a recommendation to buy or sell that security. Specific securities are mentioned for informational purposes only.